Critical Review: Omnicom Group (OMC) and HAVAS (HAVSF)

Omnicom Group (NYSE: OMC) and HAVAS (OTCMKTS:HAVSF) are both business services companies, but which is the better investment? We will compare the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, dividends, risk, earnings and valuation.

Dividends

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Omnicom Group pays an annual dividend of $2.40 per share and has a dividend yield of 3.3%. HAVAS does not pay a dividend. Omnicom Group pays out 47.1% of its earnings in the form of a dividend. Omnicom Group has raised its dividend for 8 consecutive years.

Volatility and Risk

Omnicom Group has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, HAVAS has a beta of 0.04, meaning that its stock price is 96% less volatile than the S&P 500.

Earnings and Valuation

This table compares Omnicom Group and HAVAS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Omnicom Group $15.27 billion 1.08 $1.09 billion $5.10 14.07
HAVAS $2.52 billion 1.79 $193.04 million $0.46 23.37

Omnicom Group has higher revenue and earnings than HAVAS. Omnicom Group is trading at a lower price-to-earnings ratio than HAVAS, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

98.6% of Omnicom Group shares are held by institutional investors. 1.1% of Omnicom Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Omnicom Group and HAVAS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Omnicom Group 7.12% 40.67% 5.16%
HAVAS N/A N/A N/A

Analyst Ratings

This is a summary of recent recommendations and price targets for Omnicom Group and HAVAS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Omnicom Group 2 11 3 0 2.06
HAVAS 0 1 0 0 2.00

Omnicom Group presently has a consensus price target of $82.50, suggesting a potential upside of 15.00%. Given Omnicom Group’s stronger consensus rating and higher possible upside, research analysts plainly believe Omnicom Group is more favorable than HAVAS.

Summary

Omnicom Group beats HAVAS on 14 of the 17 factors compared between the two stocks.

About Omnicom Group

Omnicom Group Inc., together with its subsidiaries, provides advertising, marketing, and corporate communications services. The company offers a range of services in the areas of advertising, customer relationship management, public relations, and healthcare. Its services comprises advertising, branding, content marketing, corporate social responsibility consulting, crisis communication, custom publishing, data analytics, database management, digital/direct marketing, digital transformation, financial/corporate business-to-business advertising, graphic arts/digital imaging, healthcare marketing and communications, and instore design services. The company's services also include direct, entertainment, experiential, field, interactive, mobile, multi-cultural, non-profit, shopper, promotional, retail, search engine, social media, and sports and event marketing services; and investor relations, marketing research, media planning and buying, organizational communications, package design, product placement, public affairs, public relations, and merchandising and point of sale services. It operates in North America, Latin America, Europe, the Middle East, Africa, Australia, China, India, Japan, Korea, New Zealand, Singapore, and other Asian countries. Omnicom Group Inc. was founded in 1944 and is based in New York, New York.

About HAVAS

Havas SA, together with its subsidiaries, provides advertising, media, and digital services worldwide. It offers brand strategy, consulting, advertising, and brand content; media planning and buying; corporate, financial, and human resource communication; direct, relational, promotional, and interactive marketing; content creation; marketing and design; sports marketing; and healthcare communication services. The company was formerly known as Havas Advertising and changed its name to Havas SA in 2002. Havas SA was founded in 1835 and is headquartered in Puteaux, France. Havas SA is a subsidiary of Vivendi SA.

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